MPC jetsetter ‘Danny’ earned his air miles

Thursday 23 October 2008 09:59 BST

So another cut in interest rates by the Bank of England looks nailed on next month after Governor Mervyn King's "recession is coming" speech — it's now just a question of how big a trim. Half a percentage point would not be a surprise but some doom-mongers are calling for a full one point.Former monetary policy committee member Sushil Wadhwani made the case for slashing 100 basis points on Today, accusing the current Bank of England team of being too slow to recognise the threat of recession and suggesting the Bank's tardiness in cutting rates will prolong the downturn. Wadhwani was implicitly backing the arch-dove of the MPC, David "Danny" Blanchflower, who has been calling for rate cuts all year.Critics have not liked Blanchflower's cosy arrangement that allows him to commute from the American East Coast every month at British taxpayers' expense to attend MPC meetings. However, at least his money looks to be well spent. MPC hawks such as Tim Besley now appear misguided as they worried about inflation instead of unemployment.

Blanchflower was right.

Heart-warming tale on Iceland

The collapse of the Icelandic banks is not bad news for everyone. The nearest bar to Landsbanki's Aldgate office, La Piazzetta on White Kennet Street, is doing a roaring trade. Locals say it had been almost empty since opening a few months ago, but is now heaving with Landsbanki staff sent in from Reykjavik who have been living it up since arriving in the capital, and London-based employees who have suddenly found themselves with a lot more time on their hands. Question is, what will the bar do when the Vikings get back in their longboats and head for home?

* The credit crunch has meant the increasingly widespread acceptance of the numerical term the quadrillion. That's a thousand trillion. That's 15 noughts. So what's a gazillion then?

Keeping cash under the mattress

The other day, a man walked into his branch of Crédit Agricole in Angoulême and asked for all his assets to be liquidated and given to him in cash — a cool 5 million (£4 million) in total.

After the bank clerk's jaw was scraped off the floor, lengthy discussions ensued between the customer — who was apparently panicked by the financial crisis — and the bank over just who would pay for the transportation of the cash.A spokesman at Banque de France in Poitiers, which would oversee the physical transfer operation, commented: "It's perfectly legal and technically possible. We have the cash for such an operation."

But he added sniffily: "However, it is out of the question that we pay for the exceptional costs involved in transporting the money."

The problem is the security firm that would transport the cash to the customer — Brink's — is only insured for up to 2 million a lorry. So the cash will have to be taken to the unnamed customer's home in three costly trips. City Spy trusts he has a big mattress...

Making a killing at Goldman

Defanged. Mean anything to you? Next week, the lucky few at Goldman Sachs will be told which of them will be made up to partner. At the same time, some existing partners will be "defanged" — Goldman code for not being on the list of recipients of the email the chief, Lloyd Blankfein, sends round the partnership welcoming the newcomers. Partners check for the names that have gone, or have been "defanged", before they look for those that have been added.

* When City Spy puts the word "defanged" to a Goldman insider, he says there is another word they use with the same meaning: "killed".

Sounds like too much monkey business..

Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for $10 each. The villagers, seeing that there were many monkeys around, went out to the forest and started catching them. The man bought thousands at $10 and, as supply started to diminish, the villagers stopped their efforts. He further announced that he would now buy at $20 for a monkey.

This renewed the efforts of the villagers, and they started catching monkeys again. Soon the supply diminished even further and people started going back to their farms. The offer increased to $25 each, and the supply of monkeys became so small that it was difficult to find a monkey, let alone catch one.

The man now announced that he would buy monkeys at $50. However, since he had to go to the city on some business, his assistant would now buy on his behalf.

In the absence of the man, the assistant told the villagers: "Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35, and when the man returns from the city, you can sell them to him for $50 each."

The villagers rounded up all their savings and bought all the monkeys. They never saw the man or his assistant again — only monkeys everywhere.

Now you have a better understanding of how the stock market works.

* Surveillance: HBOS chief Andy Hornby in the away end at the Valley on Tuesday night enjoying an exhilarating Bristol City victory over Charlton.

* The perfect metaphor: Shadow Chancellor George Osborne had to interrupt his fateful Mediterranean holiday at Nat Rothschild's villaand on board Oleg Deripaska's yacht to fly back to London — leaving his wife and children in Corfu briefly — to deliver a speech on...child poverty.